Dominion Diamond says no contact with Washington Corp after offer

Susan Taylor

2 Min Read

TORONTO (Reuters) - Canada’s Dominion Diamond Corp DDC.TO DDC.N has not had any contact with Washington Corp since the privately held company made public its unsolicited $1.1 billion offer in late March, said Dominion Chairman Jim Gowans on Thursday.

Calgary, Alberta-based Dominion launched a formal sale process on March 27, after the approach by U.S. billionaire Dennis Washington. Dominion has repeatedly offered to engage with Washington Corp on “customary terms,” Gowans said on a conference call with analysts, but that has not happened.

Dominion, which is seeking a new chief executive officer, is pleased with the progress of its strategic review process, Gowans said, but he would not answer a question on whether there was more than one party interested in the miner.

Prices for smaller, cheaper stones have dropped by 25 percent from the end of the third quarter, said executive vice president James Pounds on a call to discuss the company’s fourth-quarter results. Prices for larger, better-quality stones had held up, due to lower stocks, he said.

Overall, rough diamond prices dropped by 7 percent, said the company, which expects demand for smaller diamonds to recover by the end of its second fiscal quarter this year.

Last November, India scrapped smaller bank notes as part of a surprise clamp-down on cash businesses. That hurt the country’s cutting and polishing industry for small stones, typically below 1 carat, driving demand and prices lower.

“Dominion remains somewhat cautious on the impact of Indian demonetization, but was constructive on the Indian jewelry retail demand and returning demand from China,” said BMO analyst Edward Sterck in a note to clients following the call.